Contrarian Value Investing

What a week for value investors. First, Buffett and his cult following headed for Omaha for the annual meeting and then McGraw-Hill announces they will publish 75th Anniversary Edition of Graham and Dodd’s Security Analysis. Of course, the former received more media attention than the latter but in my opinion, the latter is of greater importance.

Value Investors were left disappointed as they felt the last edition of Security Analysis, authored by Cottle, Murray, and Block, had very little “Graham and Dodd” left in it. Even the first edition of Security Analysis receives criticism for being published in an era where bargain were plentiful due to the Great Depression. Thus, Value Investor’s are left with the 2nd,3rd and 4th editions of Security Analysis to satisfy their Graham and Doddism. Nevertheless, I am impressed with the lineup McGraw-Hill has selected for the 75th Anniversary edition which will include a forward by Warren Buffett. This lineup might rival that of the 1927 New York Yankees, arguably the greatest baseball team ever assembled which included names like Ruth, Gehrig, Cobs, Koenig, Meusel, Lazzeri. So who will step up to the plate? (pun intended)……

• Seth Klarman, presindent of Boston’s The Baupost Group and author of a really expensive book.
• Bruce Greenwald, Professor of Finance and Asset Management at Colombia’s Business School and author of Value Investing: From Graham to Buffett and Beyond
• J. Ezra Merkin, Gabriel Capital Group
• Bruce Berkowitz, Fairholme Capital Management
  
• Glenn Greenberg, Chieftain Capital Management
• David Abrams, Abrams Capital Management
• Thomas Russo, Gardner Russo & Gardner, will write about global value investing

One of the criticisms of Security Analysis has always been that the style of writing is very vague. I agree. But, included in the list of authors and is not mentioned above is Roger Lowenstein author of Buffett: The Making of an American Capitalist, which in my opinion is the best Warren Buffett biography around.

Many value investors already have a copy of Security Analysis on their library. I think this edition will not be disappointed based on the lineup McGraw-Hill has assigned to update the book. The names listed above, and those not listed, are well known in their respected fields and bring years of practice to the table. I am especially looking forward to the forward by Warren Buffett. His introduction in The Intelligent Investor is a classic in my opinion and has set the bar high for his introduction in Security Analysis.

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